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CBO Report: Keeping it out of the light – The Regime’s Distraction Enhancement Program

2014/07/16

Along The Road To (Fiscal) Perdition

via IBD Editorials

Debt: No sooner had the White House crowed about a smaller deficit than the Congressional Budget Office reported that the country is headed toward fiscal ruin driven by excessive spending, much of it the result of ObamaCare.

Last Friday, in announcing the release of the administration’s updated budget numbers, the acting White House budget director bragged that the deficit is undergoing “the most rapid sustained deficit reduction since World War II, and it continues to fall.”

What he didn’t say is that it fell from all-time highs produced by Obama’s spending spree. Or that deficits will soon stop falling and — under current policies — begin a steady and unbroken climb for decades.

The CBO’s long-term budget report, released on Tuesday, shows that if nothing changes, the debt held by the public will exceed the entire economy in 25 years — the first time that’s happened since World War II — and will continue to climb from there.

The report also shows that this fiscal crisis is entirely due to the spending side of the ledger.

Over the next quarter-century, the CBO expects federal revenues as a share of GDP to climb from 17.6% this year (which is close to the post-World War II average) to more than 19%. But spending will climb even faster — hitting 25.9% that year, from today’s 20.4%. And in another 25 years, federal spending will account for more than 30% of the economy.

The resulting debt will raise interest rates, slow economic growth and make it harder to deal with unexpected problems. Worse, while the WWII debt quickly evaporated once the war was over and outlays plummeted, today’s debt crisis is driven by benefit spending that’s virtually unstoppable.

This, says the CBO, “results entirely from projected increases in spending for a few large programs: Social Security, Medicare, Medicaid, and the (ObamaCare) insurance subsidies.”

Dig a little deeper and you find that health spending is the biggest culprit. In 50 years, half of all federal revenues will go just for Medicare, Medicaid and Obama-Care subsidies — up from 25% today.

Keep digging and you find that much of this excessive growth is being driven by ObamaCare itself. The report says 62% of the increase in federal health programs over the next decade will come from ObamaCare’s expansion of Medicaid and the new insurance subsidies.

And over the next 25 years, the growth for these two programs will be nearly triple that of overall spending.

What’s more, CBO expects ObamaCare to experience “excess cost growth” — that is, per-person increases in health spending above and beyond the growth rate of potential per-capita GDP. For ObamaCare, the excess will be 2% a year vs. 1.8% for Medicaid and 0% for Medicare.

The only reason total federal spending and debt don’t climb even faster in the coming decades is the CBO reckons that discretionary spending — including the military, roads, education and the environment — will fall as a share of the economy.

When Obama was pitching ObamaCare, he argued that without controlling federal health costs, the government could never get deficits under control. “Put simply,” he said in a 2009 speech before Congress, “our health care problem is our deficit problem. Nothing else even comes close. Nothing else.”

The president was right in his deficit diagnosis. But his ObamaCare prescription has only made the problem worse.

No matter, even now, the Obama’s still like to rub the taxpayer’s nose it it: Check Out Obama’s Multimillion-Dollar Martha’s Vineyard Vacation Pad. No mention that the place could easily house at least 3,000 of Obama’s unlawful invaders. It is also highly unlikely the Obama’s or their entourage will be sharing any of the wealth either.

President Obama and the first lady are planning a two-week vacation at a seven-bedroom, nine-bathroom home in Chilmark, the Martha’s Vineyard Times reports.

The first family will travel to the island from Aug. 9 to Aug. 24, making the 15-day getaway the longest summer vacation of Obama’s presidency. While the location of their vacation home was supposed to be under wraps, neighbors confirmed to the local newspaper that the Obamas will be staying at a luxurious home owned (by 1-percenter) Joanne Hubschman, whose late husband, Henry, was a former executive at General Electric.

The 17-room house, worth an estimated $12 million, sits on a 10-acre lot and features an infinity pool, a dual tennis-basketball court, an indoor gym and views of the Vineyard Sound, according to the Martha’s Vineyard Times.

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